JOS. A. BANK CLOTHIERS, INC.
RETIREMENT & SAVINGS PLAN
Plan and Trust Agreement
As Amended and Restated
Effective April 1, 1994
Jos. A. Bank Clothiers, Inc. Retirement & Savings Plan and Trust
As Amended and Restated Effective April 1, 1994
Jos. A. Bank Clothiers, Inc. previously established the Jos. A. Bank Clothiers,
Inc. Retirement & Savings Plan for the benefit of eligible employees of the
Company and its participating affiliates. The Plan is intended to constitute a
qualified profit sharing plan, as described in Code section 401(a), which
includes a qualified cash or deferred arrangement, as described in Code section
401(k).
The provisions of this Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between Jos. A. Bank Clothiers,
Inc. and Wells Fargo Bank, National Association. The Trust is intended to be tax
exempt as described under Code section 501(a).
The Plan constitutes an amendment and restatement of the Jos. A. Bank Clothiers,
Inc. Retirement & Savings Plan which was originally established effective as of
February 1, 1976, and its related trust agreement.
The Jos. A. Bank Clothiers, Inc. Retirement & Savings Plan and Trust, as set
forth in this document, is hereby amended and restated effective as of April 1,
1994.
Date: ____________________, 19___ Jos. A. Bank Clothiers, Inc.
By: ____________________________
Title:
The trust agreement set forth in those provisions of this Plan and Trust which
relate to the Trustee is hereby executed.
Date: _____________________, 19___ Wells Fargo Bank, National Association
By: ____________________________
Title:
Date: _____________________, 19___ Wells Fargo Bank, National Association
By: ____________________________
Title:
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TABLE OF CONTENTS
1. DEFINITIONS....................................................... 1
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2 ELIGIBILITY....................................................... 8
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2.1 Eligibility............................................. 8
2.2 Ineligible Employees.................................... 8
2.3 Ineligible or Former Participants....................... 8
3 PARTICIPANT CONTRIBUTIONS......................................... 9
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3.1 Pre-Tax Contribution Election........................... 9
3.2 Changing a Contribution Election........................ 9
3.3 Revoking and Resuming a Contribution Election........... 9
3.4 Contribution Percentage Limits.......................... 9
3.5 Refunds When Contribution Dollar Limit Exceeded......... 10
3.6 Timing, Posting and Tax Considerations.................. 10
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS.............................. 11
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4.1 Rollovers............................................... 11
4.2 Transfers From Other Qualified Plans.................... 11
5 EMPLOYER CONTRIBUTIONS............................................ 12
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5.1 Company Match Contributions............................. 12
5.2 Company Discretionary Contributions..................... 12
5.3 Company Additional Contributions........................ 13
6 ACCOUNTING........................................................ 15
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6.1 Individual Participant Accounting....................... 15
6.2 Sweep Account is Transaction Account.................... 15
6.3 Trade Date Accounting and Investment Cycle.............. 15
6.4 Accounting for Investment Funds......................... 15
6.5 Payment of Fees and Expenses............................ 15
6.6 Accounting for Participant Loans........................ 16
6.7 Error Correction........................................ 16
6.8 Participant Statements.................................. 17
6.9 Special Accounting During Conversion Period............. 17
6.10 Accounts for QDRO Beneficiaries......................... 17
7 INVESTMENT FUNDS AND ELECTIONS.................................... 18
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7.1 Investment Funds........................................ 18
7.2 Investment Fund Elections............................... 18
7.3 Responsibility for Investment Choice.................... 18
7.4 Default if No Election.................................. 18
7.5 Timing.................................................. 19
7.6 Investment Fund Election Change Fees.................... 19
8 VESTING & FORFEITURES............................................. 20
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8.1 Fully Vested Contribution Accounts...................... 20
8.2 Full Vesting upon Certain Events........................ 20
8.3 Vesting Schedule........................................ 20
8.4 Forfeitures............................................. 20
8.5 Rehired Employees....................................... 21
9 PARTICIPANT LOANS................................................. 22
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9.1 Participant Loans Permitted............................. 22
9.2 Limitations on Purpose of Participant Loan.............. 22
9.3 Loan Application, Note and Security..................... 22
9.4 Spousal Consent......................................... 22
9.5 Loan Approval........................................... 22
9.6 Loan Funding Limits..................................... 22
9.7 Maximum Number of Loans................................. 23
9.8 Source and Timing of Loan Funding....................... 23
9.9 Interest Rate........................................... 23
9.10 Repayment............................................... 23
9.11 Repayment Hierarchy..................................... 24
9.12 Repayment Suspension.................................... 24
9.13 Loan Default............................................ 24
9.14 Call Feature............................................ 24
10 IN-SERVICE WITHDRAWALS............................................ 25
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10.1 In-Service Withdrawals Permitted........................ 25
10.2 In-Service Withdrawal Application and Notice............ 25
10.3 Spousal Consent......................................... 25
10.4 In-Service Withdrawal Approval.......................... 25
10.5 Minimum Amount, Payment Form and Medium................. 25
10.6 Source and Timing of In-Service Withdrawal
Funding............................................... 26
10.7 Hardship Withdrawals.................................... 26
10.8 Rollover Account Withdrawals............................ 27
10.9 Over Age 59 1/2Withdrawals.............................. 28
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW ......... 29
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11.1 Benefit Information, Notices and Election............... 29
11.2 Spousal Consent......................................... 29
11.3 Payment Form and Medium................................. 29
11.4 Small Amounts Paid Immediately.......................... 30
11.5 Source and Timing of Distribution Funding............... 30
11.6 Deemed Distribution..................................... 30
11.7 Latest Commencement Permitted........................... 31
11.8 Payment Within Life Expectancy.......................... 31
11.9 Incidental Benefit Rule................................. 31
11.10 Payment to Beneficiary.................................. 31
11.11 Beneficiary Designation................................. 32
11.12 QJSA and QPSA Information and Elections ................ 32
12 ADP AND ACP TESTS................................................. 35
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12.1 Contribution Limitation Definitions..................... 35
12.2 ADP and ACP Tests....................................... 38
12.3 Correction of ADP and ACP Tests......................... 38
12.4 Multiple Use Test....................................... 39
12.5 Correction of Multiple Use Test......................... 39
12.6 Adjustment for Investment Gain or Loss.................. 39
12.7 Testing Responsibilities and Required Records........... 39
12.8 Separate Testing........................................ 40
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS...................... 41
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13.1 "Annual Addition" Defined............................... 41
13.2 Maximum Annual Addition................................. 41
13.3 Avoiding an Excess Annual Addition...................... 41
13.4 Correcting an Excess Annual Addition.................... 41
13.5 Correcting a Multiple Plan Excess....................... 42
13.6 "Defined Benefit Fraction" Defined...................... 42
13.7 "Defined Contribution Fraction" Defined................. 42
13.8 Combined Plan Limits and Correction..................... 42
14 TOP HEAVY RULES................................................... 43
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14.1 Top Heavy Definitions................................... 43
14.2 Special Contributions................................... 44
14.3 Adjustment to Combined Limits for Different
Plans................................................. 45
15 PLAN ADMINISTRATION............................................... 46
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15.1 Plan Delineates Authority and Responsibility............ 46
15.2 Fiduciary Standards..................................... 46
15.3 Company is ERISA Plan Administrator..................... 46
15.4 Administrator Duties.................................... 47
15.5 Advisors May be Retained................................ 47
15.6 Delegation of Administrator Duties...................... 48
15.7 Committee Operating Rules............................... 48
16 MANAGEMENT OF INVESTMENTS......................................... 49
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16.1 Trust Agreement......................................... 49
16.2 Investment Funds........................................ 49
16.3 Authority to Hold Cash.................................. 49
16.4 Trustee to Act Upon Instructions........................ 50
16.5 Administrator Has Right to
Vote Registered Investment Company Shares............. 50
16.6 Custom Fund Investment Management ...................... 50
16.7 Authority to Segregate Assets........................... 51
17 TRUST ADMINISTRATION.............................................. 52
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17.1 Trustee to Construe Trust............................... 52
17.2 Trustee To Act As Owner of Trust Assets................. 52
17.3 United States Indicia of Ownership...................... 52
17.4 Tax Withholding and Payment............................. 53
17.5 Trustee Duties and Limitations.......................... 53
17.6 Trust Accounting........................................ 53
17.7 Valuation of Certain Assets............................. 54
17.8 Legal Counsel........................................... 54
17.9 Fees and Expenses....................................... 54
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION................. 55
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18.1 Plan Does Not Affect Employment Rights.................. 55
18.2 Limited Return of Contributions......................... 55
18.3 Assignment and Alienation............................... 55
18.4 Facility of Payment..................................... 56
18.5 Reallocation of Lost Participant's Accounts............. 56
18.6 Claims Procedure........................................ 56
18.7 Construction............................................ 57
18.8 Jurisdiction and Severability........................... 57
18.9 Indemnification by Employer............................. 57
19 AMENDMENT, MERGER AND TERMINATION................................. 58
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19.1 Amendment............................................... 58
19.2 Merger.................................................. 58
19.3 Plan Termination........................................ 58
19.4 Termination of Employer's Participation................. 59
19.5 Replacement of the Trustee.............................. 59
19.6 Final Settlement and Accounting of Trustee.............. 59
APPENDIX A - INVESTMENT FUNDS.............................................. 61
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES............................. 62
APPENDIX C - LOAN INTEREST RATE............................................ 63
1 DEFINITIONS
When capitalized, the words and phrases below have the following
meanings unless different meanings are clearly required by the context:
1.1 "Account". The records maintained for purposes of accounting
for a Participant's interest in the Plan. "Account" may refer
to one or all of the following accounts which have been
created on behalf of a Participant to hold specific types of
Contributions under the Plan:
(a) "Pre-Tax Account". An account created to hold Pre-Tax
Contributions.
(b) "Rollover Account". An account created to hold
Rollover Contributions.
(c) "Company Match Account". An account created to hold
Company Match Contributions.
(d) "Company Discretionary Account". An account created
to hold Company Discretionary Contributions.
(e) "Company Additional Account". An account created to
hold Company Additional Contributions.
1.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
1.3 "Administrator". The Company, which may delegate all or a
portion of the duties of the Administrator under the Plan to a
Committee in accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage
calculated in accordance with Section 12.1.
1.5 "Beneficiary". The person or persons who is to receive
benefits after the death of the Participant pursuant to the
"Beneficiary Designation" paragraph in Section 11, or as a
result of a QDRO.
1.6 "Break in Service". The end of five consecutive Plan Years (or
six consecutive Plan Years if absence from employment was due
to a Parental Leave) for which a Participant is credited with
no Hours of Service.
1.7 "Code". The Internal Revenue Code of 1986, as amended.
Reference to any specific Code section shall include such
section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending,
supplementing or superseding such section.
1.8 "Committee". If applicable, the committee which has been
appointed by the Company to administer the Plan in accordance
with Section 15.6.
1.9 "Company". Jos. A. Bank Clothiers, Inc. or any successor by
merger, purchase or otherwise.
1.10 "Compensation". The sum of a Participant's Taxable Income and
salary reductions, if any, pursuant to Code sections 125,
402(e)(3), 402(h), 403(b), 414(h)(2) or 457.
For purposes of determining benefits under this Plan,
Compensation is limited to $200,000 (as indexed for the cost
of living pursuant to Code sections 401(a)(17) and 415(d)) per
Plan Year. For purposes of determining benefits under this
Plan for Plan Years beginning after December 31, 1993,
Compensation is limited to $150,000 (as indexed for the cost
of living pursuant to Code sections 401(a)(17) and 415(d)) per
Plan Year.
For purposes of the preceding sentences, in the case of an HCE
who is a 5% Owner or one of the 10 most highly compensated
Employees, (i) such HCE and such HCE's family group (as
defined below) shall be treated as a single employee and the
Compensation of each family group member shall be aggregated
with the Compensation of such HCE, and (ii) the limitation on
Compensation shall be allocated among such HCE and his or her
family group members in proportion to each individual's
Compensation before the application of this sentence. For
purposes of this Section, the term "family group" shall mean
an Employee's spouse and lineal descendants who have not
attained age 19 before the close of the year in question.
For the purpose of determining HCEs and key employees,
Compensation for the entire Plan Year shall be used. For the
purpose of determining ADP and ACP, Compensation shall be
limited to amounts paid to an Eligible Employee while a
Participant.
1.11 "Contribution". An amount contributed to the Plan by the
Employer or an Eligible Employee, and allocated by
contribution type to Participants' Accounts, as described in
Section 1.1. Specific types of contribution include:
(a) "Pre-Tax Contribution". An amount contributed by the
Employer on an eligible Participant's behalf in
conjunction with a Participant's Code section 401(k)
salary deferral election.
(b) "Rollover Contribution". An amount contributed by an
Eligible Employee which originated from another
employer's qualified plan.
(c) "Company Match Contribution". An amount contributed
by the Employer on an eligible Participant's behalf
based upon the amount contributed by the eligible
Participant.
(d) "Company Discretionary Contribution". An amount
contributed by the Employer on an eligible
Participant's behalf and allocated on a pay based
formula to the Participant.
(e) "Company Additional Contribution". An amount
contributed by the Employer on an eligible
Participant's behalf which is fully vested.
1.12 "Contribution Dollar Limit". The annual limit placed on each
Participant's Pre- Tax Contributions, which shall be $7,000
per calendar year (as indexed for the cost of living pursuant
to Code section 402(g)(5) and 415(d)). For purposes of this
Section, a Participant's Pre-Tax Contributions shall include
(i) any Employer contribution made under any qualified cash or
deferred arrangement as defined in Code section 401(k) to the
extent not includible in gross income for the taxable year
under Code section 402(e)(3) or 402(h)(1)(B) (determined
without regard to Code section 402(g)), and (ii) any Employer
contribution to purchase an annuity contract under Code
section 403(b) under a salary reduction agreement (within the
meaning of Code section 3121(a)(5)(D)).
1.13 "Direct Rollover". A payment from the Plan to an Eligible
Retirement Plan specified by a Distributee.
1.14 "Disability". A Participant's total and permanent, mental or
physical disability resulting in termination of employment as
evidenced by presentation of medical evidence satisfactory to
the Administrator.
1.15 "Distributee". An Employee or former Employee, the surviving
spouse of an Employee or former Employee and a spouse or
former spouse of an Employee or former Employee determined to
be an alternate payee under a QDRO.
1.16 "Effective Date". April 1, 1994, unless stated otherwise. The
date upon which the provisions of this document become
effective. In general, the provisions of this document only
apply to Participants who are Employees on or after the
Effective Date. However, investment and distribution
provisions apply to all Participants with Account balances to
be invested or distributed after the Effective Date.
1.17 "Eligible Employee". An Employee of an Employer, except any
Employee:
(a) whose compensation and conditions of employment are
covered by a collective bargaining agreement to which
an Employer is a party unless the agreement calls for
the Employee's participation in the Plan; or
(b) who is treated as an Employee because he or she is a
Leased Employee.
1.18 "Eligible Retirement Plan". An individual retirement account
described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust
described in Code section 401(a), that accepts a Distributee's
Eligible Rollover Distribution, except that with regard to an
Eligible Rollover Distribution to a surviving spouse, an
Eligible Retirement Plan is an individual retirement account
or individual retirement annuity.
1.19 "Eligible Rollover Distribution". A distribution of all or any
portion of the balance to the credit of a Distributee,
excluding a distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of a
Distributee or the joint lives (or joint life expectancies) of
a Distributee and the Distributee's designated Beneficiary, or
for a specified period of ten years or more; a distribution to
the extent such distribution is required under Code section
401(a)(9); and the portion of a distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
Employer securities).
1.20 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom
any income for such employment is subject to
withholding of income or social security taxes, or
(b) a Leased Employee.
1.21 "Employer". The Company and any Subsidiary or other Related
Company of either the Company or a Subsidiary which adopts
this Plan with the approval of the Company.
1.22 "ERISA". The Employee Retirement Income Security Act of 1974,
as amended. Reference to any specific section shall include
such section, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation amending,
supplementing or superseding such section.
1.23 "Forfeiture Account". An account holding amounts forfeited by
Participants who have left the Employer, invested in interest
bearing deposits of the Trustee, pending disposition as
provided in this Plan and Trust and as directed by the
Administrator.
1.24 "HCE" or "Highly Compensated Employee". An Employee described
as a Highly Compensated Employee in Section 12.
1.25 "Hour of Service". Each hour for which an Employee is entitled
to:
(a) payment for the performance of duties for any Related
Company;
(b) payment from any Related Company for any period
during which no duties are performed (irrespective of
whether the employment relationship has terminated)
due to vacation, holiday, sickness, incapacity
(including disability), layoff, leave of absence,
jury duty or military service;
(c) back pay, irrespective of mitigation of damages, by
award or agreement with any Related Company (and
these hours shall be credited to the period to which
the agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these
hours shall be based upon his or her normally
scheduled hours per week or a 40 hour week if there
is no regular schedule).
The crediting of hours for which no duties are performed shall
be in accordance with Department of Labor regulation sections
2530.200b-2(b) and (c). Actual hours shall be used whenever an
accurate record of hours are maintained for an Employee.
Otherwise, an equivalent number of hours shall be credited for
each payroll period in which the Employee would be credited
with at least 1 hour. The payroll period equivalencies are 45
hours weekly, 90 hours biweekly, 95 hours semimonthly and 190
hours monthly.
Hours credited prior to a Break in Service are included.
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her Hours
of Service for eligibility and/or vesting purposes if (1) the
Company directs that credit for such service be granted, or
(2) a qualified plan of the predecessor or acquired company is
subsequently maintained by any Employer or Related Company.
1.26 "Ineligible". The Plan status of an individual during the
period in which he or she is (1) an Employee of a Related
Company which is not then an Employer, (2) an Employee, but
not an Eligible Employee, or (3) not an Employee.
1.27 "Investment Fund" or "Fund". An investment fund as described
in Section 16.2. The Investment Funds authorized by the
Administrator to be offered as of the Effective Date to
Participants and Beneficiaries are as set forth in Appendix A.
1.28 "Leased Employee". An individual who is deemed to be an
employee of any Related Company as provided in Code section
414(n) or (o).
1.29 "Leave of Absence". A period during which an individual is
deemed to be an Employee, but is absent from active
employment, provided that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States
armed forces and the individual returns to active
employment within the period during which he or she
retains employment rights under federal law.
1.30 "NHCE" or "Non-Highly Compensated Employee". An Employee
described as a Non-Highly Compensated Employee in Section 12.
1.31 "Normal Retirement Date". The later of the date on which a
Participant attains age 65 or completes five Years of Vesting
Service.
1.32 "Owner". A person with an ownership interest in the capital,
profits, outstanding stock or voting power of a Related
Company within the meaning of Code section 318 or 416 (which
exclude indirect ownership through a qualified plan).
1.33 "Parental Leave". The period of absence from work by reason of
pregnancy, the birth of an Employee's child, the placement of
a child with the Employee in connection with the child's
adoption, or caring for such child immediately after birth or
placement as described in Code section 410(a)(5)(E).
1.34 "Participant". An Eligible Employee who begins to participate
in the Plan after completing the eligibility requirements as
described in Section 2.1. A Participant's participation
continues until his or her employment with all Related
Companies ends and his or her Account is distributed or
forfeited.
1.35 "Pay". All cash compensation paid to an Eligible Employee by
an Employer while a Participant during the current period.
Pay is neither increased nor decreased by any salary credit or
reduction pursuant to Code sections 125 or 402(e)(3). Pay is
limited to $200,000 (as indexed for the cost of living
pursuant to Code sections 401(a)(17) and 415(d)) per Plan
Year. Pay is limited to $150,000 (as indexed for the cost of
living pursuant to Code sections 401(a)(17) and 415(d)) per
Plan Year effective for Plan Years beginning after December
31, 1993.
1.36 "Plan". The Jos. A. Bank Clothiers, Inc. Retirement & Savings
Plan set forth in this document, as from time to time amended.
1.37 "Plan Year". The annual accounting period of the Plan and
Trust which ends on each June 30.
1.38 "QDRO". A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within
the meaning of Code section 414(p).
1.39 "Related Company". With respect to any Employer, that Employer
and any corporation, trade or business which is, together with
that Employer, a member of the same controlled group of
corporations, a trade or business under common control, or an
affiliated service group within the meaning of Code section
414(b), (c), (m) or (o).
1.40 "Settlement Date". For each Trade Date, the Trustee's next
business day.
1.41 "Spousal Consent". The written consent given by a spouse to a
Participant's election or waiver of a specified form of
benefit, including a loan or in-service withdrawal, or
Beneficiary designation. The spouse's consent must
acknowledge the effect on the spouse of the Participant's
election, waiver or designation and be duly witnessed by a
Plan representative or notary public. Spousal Consent shall
be valid only with respect to the spouse who signs the
Spousal Consent and only for the particular choice made by
the Participant which requires Spousal Consent. A Participant
may revoke (without Spousal Consent) a prior election, waiver
or designation that required Spousal Consent at any time
before payments begin. Spousal Consent also means a
determination by the Administrator that there is no spouse,
the spouse cannot be located, or such other circumstances as
may be established by applicable law.
1.42 "Subsidiary". A company which is 50% or more owned, directly
or indirectly, by the Company.
1.43 "Sweep Account". The subsidiary Account for each Participant
through which all transactions are processed, which is
invested in interest bearing deposits of the Trustee.
1.44 "Sweep Date". The cut off date and time for receiving
instructions for transactions to be processed on the next
Trade Date.
1.45 "Taxable Income". Compensation in the amount reported by the
Employer as "Wages, tips, other compensation" on Form W-2, or
any successor method of reporting under Code section 6041(d).
1.46 "Trade Date". Each day the Investment Funds are valued, which
is normally every day the assets of such Funds are traded.
1.47 "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. The Trust is part of the
Plan and holds the Plan assets which are comprised of the
aggregate of Participants' Accounts and the Forfeiture
Account.
1.48 "Trustee". Wells Fargo Bank, National Association.
1.49 "Year of Vesting Service". A 12 consecutive month period
ending on the last day of a Plan Year in which an Employee is
credited with at least 1,000 Hours of Service.
Years of Vesting Service shall include service credited prior
to February 1, 1976.
2 ELIGIBILITY
2.1 Eligibility
All Participants as of April 1, 1994 shall continue their
eligibility to participate. Each other Eligible Employee
shall become a Participant on the first July 1, October 1,
January 1 or April 1 after the date he or she completes a 12
month eligibility period in which he or she is credited with
at least 1,000 Hours of Service. The initial eligibility
period begins on the date an Employee first performs an Hour
of Service. Subsequent eligibility periods begin with the
start of each Plan Year beginning after the first Hour of
Service is performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements,
but is Ineligible at the time participation would otherwise
begin (if he or she were not Ineligible), he or she shall
become a Participant on the first subsequent date on which he
or she is an Eligible Employee.
2.3 Ineligible or Former Participants
A Participant may not make or share in Plan Contributions,
nor generally be eligible for a new Plan loan, during the
period he or she is Ineligible, but he or she shall continue
to participate for all other purposes. An Ineligible
Participant or former Participant shall automatically become
an active Participant on the date he or she again becomes an
Eligible Employee.
3 PARTICIPANT CONTRIBUTIONS
3.1 Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect
to reduce his or her Pay by an amount which does not exceed
the Contribution Dollar Limit, within the limits described in
the Contribution Percentage Limits paragraph of this Section
3, and have such amount contributed to the Plan by the
Employer as a Pre-Tax Contribution. The election shall be
made as a whole percentage of Pay in such manner and with
such advance notice as prescribed by the Administrator. In no
event shall an Employee's Pre-Tax Contributions under the
Plan and all other plans, contracts or arrangements of all
Related Companies exceed the Contribution Dollar Limit for
the Employee's taxable year beginning in the Plan Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or
her Pre-Tax Contribution election as of any July 1, October
1, January 1 or April 1 in such manner and with such advance
notice as prescribed by the Administrator. The changed
percentage shall become effective with the first payroll paid
after such date. Participants' Contribution election
percentages shall automatically apply to Pay increases or
decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution election at
any time in such manner and with such advance notice as
prescribed by the Administrator, and such election shall be
effective with the first payroll paid after such date.
A Participant may resume Contributions by making a new
Contribution election at the same time in which a Participant
may change his or her election, but no earlier than six
months after the date he or she revoked his or her
Contribution election,in such manner and with such advance
notice as prescribed by the Administrator, and such election
shall be effective with the first payroll paid after such
date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to time,
without the necessity of amending this Plan and Trust
document, the minimum, if applicable, and maximum Pre-Tax
Contribution percentages, prospectively or retrospectively
(for the current Plan Year), for all Participants. In
addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it
deems necessary. As of the Effective Date, the Pre-Tax
Contribution maximum percentage is 15%.
Irrespective of the limits that may be established by the
Administrator in accordance with this paragraph, in no event
shall the contributions made by or on behalf of a Participant
for a Plan Year exceed the maximum allowable under Code
section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Pre-Tax Contributions for a calendar
year to this and any other qualified defined contribution
plan in excess of the Contribution Dollar Limit may notify
the Administrator in writing by the following March 1 (or as
late as April 14 if allowed by the Administrator) that an
excess has occurred. In this event, the amount of the excess
specified by the Participant, adjusted for investment gain or
loss, shall be refunded to him or her by April 15 and shall
not be included as an Annual Addition under Code section 415
for the year contributed. Refunds shall not include
investment gain or loss for the period between the end of the
applicable Plan Year and the date of distribution. Any
Company Match Contributions attributable to refunded excess
Pre-Tax Contributions as described in this Section shall be
deemed a Contribution made by reason of a mistake of fact and
removed from the Participant's Account.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover
Contributions, may only be made through payroll deduction.
Such amounts shall be paid to the Trustee in cash and posted
to each Participant's Account(s) as soon as such amounts can
reasonably be separated from the Employer's general assets
and balanced against the specific amount made on behalf of
each Participant. In no event, however, shall such amounts be
paid to the Trustee more than 90 days after the date amounts
are deducted from a Participant's Pay. Pre-Tax Contributions
shall be treated as employer contributions in determining tax
deductions under Code section 404(a).
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS
4.1 Rollovers
The Administrator may authorize the Trustee to accept a
rollover contribution in cash, within the meaning of Code
section 402(c) or 408(d)(3)(A)(ii), directly from an Eligible
Employee or as a Direct Rollover from another qualified plan
on behalf of the Eligible Employee, if he or she is a
Participant. The Employee shall be responsible for furnishing
satisfactory evidence, in such manner as prescribed by the
Administrator, that the amount is eligible for rollover
treatment. A rollover contribution received directly from an
Eligible Employee must be paid to the Trustee in cash within
60 days after the date received by the Eligible Employee from
a qualified plan or conduit individual retirement account.
Contributions described in this paragraph shall be posted to
the applicable Employee's Rollover Account as of the date
received by the Trustee.
If it is later determined that an amount contributed pursuant
to the above paragraph did not in fact qualify as a rollover
contribution under Code section 402(c) or 408(d)(3)(A)(ii),
the balance credited to the Employee's Rollover Account shall
immediately be (1) segregated from all other Plan assets, (2)
treated as a nonqualified trust established by and for the
benefit of the Employee, and (3) distributed to the Employee.
Any such nonqualifying rollover shall be deemed never to have
been a part of the Plan.
4.2 Transfers From Other Qualified Plans
The Administrator may instruct the Trustee to receive assets
in cash or in kind directly from another qualified plan. The
Trustee may refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable;
(b) instructions for posting amounts to Participants'
Accounts are incomplete;
(c) any amounts are not exempted by Code section
401(a)(11)(B) from the annuity requirements of Code
section 417; or
(d) any amounts include benefits protected by Code
section 411(d)(6) which would not be preserved under
applicable Plan provisions.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee.
5 EMPLOYER CONTRIBUTIONS
5.1 Company Match Contributions
(a) Frequency and Eligibility. For each quarter of the
Plan Year, the Employer shall make Company Match
Contributions as described in the following
Allocation Method paragraph on behalf of each
Participant who contributed during the period.
(b) Allocation Method. The Company Match Contributions
(including any Forfeiture Account amounts applied as
Company Match Contributions in accordance with
Section 8.4) for each period shall total 50% of each
eligible Participant's Pre-Tax Contributions for the
period, provided that no Company Match Contributions
(and Forfeiture Account amounts) shall be made based
upon a Participant's Contributions in excess of 3% of
his or her Pay. The Employer may change the 50%
matching rate or the 3% of considered Pay to any
other percentages, including 0%, generally by
notifying eligible Participants in sufficient time to
adjust their Contribution elections prior to the
start of the period for which the new percentages
apply.
(c) Timing, Medium and Posting. The Employer shall make
each period's Company Match Contribution in cash as
soon as is feasible, and not later than the
Employer's federal tax filing date, including
extensions, for deducting such Contribution. The
Trustee shall post such amount to each Participant's
Company Match Account once the total Contribution
received has been balanced against the specific
amount to be credited to each Participant's Company
Match Account.
5.2 Company Discretionary Contributions
(a) Frequency and Eligibility. For each Plan Year, the
Employer may make a Company Discretionary
Contribution on behalf of each Participant who:
(1) was an Eligible Employee on the last day of
the period, and
(2) was credited with at least 1,000 Hours of
Service for the Plan Year.
In addition, such Contributions shall be made on
behalf of each Participant who met the requirements
of (2) but who ceased being an Employee during the
period after having attained his or her Normal
Retirement Date, or by reason of his or her
Disability or death.
(b) Allocation Method. The Company Discretionary
Contribution for each period, shall be in an amount
up to the greater of (i) the percentage equal to the
tax rate under Code section 3111(a) for the calendar
year which includes the first day of the Plan Year
and which is attributable to old-age insurance or
(ii) 5.7%, as determined by the Employer and
allocated among eligible Participants in direct
proportion to their Pay and an identical percentage
of each eligible Participant's Excess Pay. The
remaining amount, if any, shall be allocated in
direct proportion to each eligible Participant's Pay.
Excess Pay for this purpose shall mean Pay in excess
of the Social Security Taxable Wage Base for the
calendar year which includes the first day of the
Plan Year.
(c) Timing, Medium and Posting. The Employer shall make
each period's Company Discretionary Contribution in
cash as soon as is feasible, and not later than the
Employer's federal tax filing date, including
extensions, for deducting such Contribution. The
Trustee shall post such amount to each Participant's
Company Discretionary Account once the total
Contribution received has been balanced against the
specific amount to be credited to each Participant's
Company Discretionary Account.
5.3 Company Additional Contributions
(a) Frequency and Eligibility. For each Plan Year, the
Employer may make a Company Additional Contribution
on behalf of each Non-Highly Compensated Employee
Participant who contributed during the period and was
an Eligible Employee on the last day of the period.
In addition, such Contributions shall be made on
behalf of each Non- Highly Compensated Employee
Participant who contributed during the period and who
ceased being an Employee during the period after
having attained his or her Normal Retirement Date, or
by reason of his or her Disability or death.
(b) Allocation Method. The Company Additional
Contribution for each period shall be in an amount
determined by the Employer and allocated among
eligible Participants as follows:
(1) to the extent the Company Additional
Contributions are treated as Deferrals, as
such term is defined in Section 12.1, in
direct proportion to each eligible
Participant's Pay, subject to a maximum
dollar amount which may be contributed on
behalf of any Participant as determined by
the Administrator, and
(2) to the extent the Company Additional
Contributions are treated as Contributions,
as such term is defined in Section 12.1, as
a percentage of each eligible Participant's
Pre-Tax Contributions, subject to a maximum
dollar amount which may be contributed on
behalf of any Participant as determined by
the Administrator.
(c) Timing, Medium and Posting. The Employer shall make
each period's Company Additional Contribution in cash
as soon as is feasible, and not later than the
Employer's federal tax filing date, including
extensions, for deducting such contribution.
Notwithstanding, for purposes of satisfying the tests
described in Sections 12.2 and 12.4 Company
Additional Contributions must be made before the end
of the Plan Year following the Plan Year being
tested. The Trustee shall post such amount to each
Participant's Company Additional Contribution Account
once the total Contribution received has been
balanced against the specific amount to be credited
to each Participant's Company Additional Contribution
Account.
6 ACCOUNTING
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of Accounts
for each Participant in order to reflect transactions both by
type of Contribution and investment medium. Financial
transactions shall be accounted for at the individual Account
level by posting each transaction to the appropriate Account
of each affected Participant. Participant Account values shall
be maintained in shares for the Investment Funds and in
dollars for their Sweep and Participant loan Accounts. At any
point in time, the Account value shall be determined using the
most recent Trade Date values provided by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep
Account will be credited with interest up until the date on
which it is removed from the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each
Trade Date. For any transaction to be processed as of a Trade
Date, the Trustee must receive instructions for the
transaction by the Sweep Date. Such instructions shall apply
to amounts held in the Account on that Sweep Date. Financial
transactions of the Investment Funds shall be posted to
Participants' Accounts as of the Trade Date, based upon the
Trade Date values provided by the Trustee, and settled on the
Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in
shares. The Trustee is responsible for determining the share
values of each Investment Fund as of each Trade Date. To the
extent an Investment Fund is comprised of collective
investment funds of the Trustee, or any other fiduciary to the
Plan, the share values shall be determined in accordance with
the rules governing such collective investment funds, which
are incorporated herein by reference. All other share values
shall be determined by the Trustee. The share value of each
Investment Fund shall be based on the fair market value of its
underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to Account
maintenance, transaction and Investment Fund management and
maintenance, as set forth below, are paid by the Employer
directly, or indirectly, through the Forfeiture Account as
directed by the Administrator, such fees and expenses shall be
paid as set forth below. The Employer may pay a lower portion
of the fees and expenses allocable to the Accounts of
Participants who are no longer Employees.
(a) Account Maintenance: Account maintenance fees and
expenses, may include but are not limited to,
administrative, Trustee, government annual report
preparation, audit, legal, nondiscrimination testing,
and fees for any other special services. Account
maintenance fees shall be charged to Participants on
a per Participant basis provided that no fee shall
reduce a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may
include but are not limited to, recurring payment,
Investment Fund election change and loan fees.
Transaction fees shall be charged to the
Participant's Account involved in the transaction
provided that no fee shall reduce a Participant's
Account balance below zero.
(c) Investment Fund Management and Maintenance:
Management and maintenance fees and expenses related
to the Investment Funds shall be charged at the
Investment Fund level and reflected in the net gain
or loss of each Fund.
As of the Effective Date, a breakdown of which Plan fees and
expenses shall generally be borne by the Trust (and charged to
individual Participants' Accounts) and those that shall be
paid by the Employer, directly or indirectly, is set forth in
Appendix B and may be changed from time to time, without the
necessity of amending this Plan and Trust Document.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days,
from the Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Account of the
Participant and accounted for in dollars as an earmarked asset
of the borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's
Account balance with the amount that would be credited to the
Account had no error or omission been made. Funds necessary
for any such restoration shall be provided through payment
made by the Employer, or by the Trustee to the extent the
error or omission is attributable to actions or inactions of
the Trustee, or if the restoration involves an employer
contribution account, the Administrator may direct the Trustee
to use amounts from the Forfeiture Account.
6.8 Participant Statements
The Administrator shall provide Participants with statements
of their Accounts as soon after the end of each quarter of the
Plan Year as is administratively feasible.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable
accounting methods in performing their respective duties
during the period of converting the prior accounting system of
the Plan and Trust to conform to the individual Participant
accounting system described in this Section. This includes,
but is not limited to, the method for allocating net
investment gains or losses and the extent, if any, to which
contributions received by and distributions paid from the
Trust during this period share in such allocation.
6.10 Accounts for QDRO Beneficiaries
A separate Account shall be established for an alternate payee
entitled to any portion of a Participant's Account under a
QDRO as of the date and in accordance with the directions
specified in the QDRO. In addition, a separate Account may be
established during the period of time the Administrator, a
court of competent jurisdiction or other appropriate person is
determining whether a domestic relations order qualifies as a
QDRO. Such a separate Account shall be valued and accounted
for in the same manner as any other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so
provides, the portion of a Participant's Account
payable to an alternate payee may be distributed, in
a form as permissible under the Distribution Once
Employment Ends Section and Code section 414(p), to
the alternate payee at the time specified in the
QDRO, regardless of whether the Participant is
entitled to a distribution from the Plan at such
time.
(b) Participant Loans. Except to the extent required by
law, an alternate payee, on whose behalf a separate
Account has been established, shall not be entitled
to borrow from such Account. If a QDRO specifies that
the alternate payee is entitled to any portion of the
Account of a Participant who has an outstanding loan
balance, all outstanding loans shall generally
continue to be held in the Participant's Account and
shall not be divided between the Participant's and
alternate payee's Accounts.
(c) Investment Direction. Where a separate Account has
been established on behalf of an alternate payee and
has not yet been distributed, the alternate payee may
direct the investment of such Account in the same
manner as if he or she were a Participant.
7 INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
Except for Participants' Sweep and loan Accounts, the Trust
shall be maintained in various Investment Funds. The
Administrator shall select the Investment Funds offered to
Participants and may change the number or composition of the
Investment Funds, subject to the terms and conditions agreed
to with the Trustee. As of the Effective Date, a list of the
Investment Funds offered to Participants is set forth in
Appendix A, and may be changed from time to time, without the
necessity of amending this Plan and Trust document.
7.2 Investment Fund Elections
Each Participant shall direct the investment of all of his or
her Contribution Accounts.
A Participant shall make his or her investment election in any
combination of one or any number of the Investment Funds
offered in accordance with the procedures established by the
Administrator and Trustee. However, during the period of
converting the prior accounting system of the Plan and Trust
to conform to the individual Participant accounting system
described in Section 6, Trust assets may be held in any
investment vehicle permitted by the Plan, as directed by the
Administrator, irrespective of Participant investment
elections.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific
Investment Fund, which maximum, if any, is set forth in
Appendix A, and may be changed from time to time, without the
necessity of amending this Plan and Trust document.
7.3 Responsibility for Investment Choice
Each Participant shall be solely responsible for the selection
of his or her Investment Fund choices. No fiduciary with
respect to the Plan is empowered to advise a Participant as to
the manner in which his or her Accounts are to be invested,
and the fact that an Investment Fund is offered shall not be
construed to be a recommendation for investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which is
not yet held in an Investment Fund and for which no valid
investment election is on file. The Investment Fund specified
as of the Effective Date is as set forth in Appendix A, and
may be changed from time to time, without the necessity of
amending this Plan and Trust document.
7.5 Timing
A Participant shall make his or her initial investment
election upon becoming a Participant and may change his or her
election at any time in accordance with the procedures
established by the Administrator and Trustee. Investment
elections received by the Trustee by the Sweep Date will be
effective on the following Trade Date.
7.6 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes in
excess of a specified number per year as determined by the
Administrator.
8 VESTING & FORFEITURES
8.1 Fully Vested Contribution Accounts
A Participant shall be fully vested in these Accounts at all
times:
Pre-Tax Account
Rollover Account
Company Match Account
Company Additional Account
8.2 Full Vesting upon Certain Events
A Participant's entire Account shall become fully vested once
he or she has attained his or her Normal Retirement Date as an
Employee or upon his or her leaving the Employer due to his or
her Disability or death.
8.3 Vesting Schedule
In addition to the vesting provided above, a Participant's
Company Discretionary Account shall become vested in
accordance with the following schedule:
Years of Vesting Vested
Service Percentage
------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
If this vesting schedule is changed, the vested percentage for
each Participant shall not be less than his or her vested
percentage determined as of the last day prior to this change,
and for any Participant with at least three Years of Vesting
Service when the schedule is changed, vesting shall be
determined using the more favorable vesting schedule.
8.4 Forfeitures
A Participant's non-vested Account balance shall be forfeited
as of the Settlement Date following the Sweep Date on which
the Administrator has reported to the Trustee that the
Participant's employment has terminated with all Related
Companies. Forfeitures from all Employer Contribution Accounts
shall be transferred to and maintained in a single Forfeiture
Account, which shall be invested in interest bearing deposits
of the Trustee. Forfeiture Account amounts shall be utilized
to restore Accounts, to pay Plan fees and expenses and to
reduce Company Match Contributions as directed by the
Administrator.
8.5 Rehired Employees
(a) Service. If a former Employee is rehired, all Years
of Vesting Service credited prior to his or her
termination of employment shall be counted in
determining his or her vested interest.
(b) Account Restoration. If a former Employee is rehired
before he or she has a Break in Service, the amount
forfeited when his or her employment last terminated
shall be restored to his or her Account. The
restoration shall include the interest which would
have been credited had such forfeiture been invested
in the Sweep Account from the date forfeited until
the date the restoration amount is determined. The
amount shall come from the Forfeiture Account to the
extent possible, and any additional amount needed
shall be contributed by the Employer. The vested
interest in his or her restored Account shall then be
equal to:
V% times (AB + D) - D
where:
V% = current vested percentage
AB = current account balance
D = amount previously distributed
9 PARTICIPANT LOANS
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms and
conditions set forth in this Section.
9.2 Limitations on Purpose of Participant Loan
A Participant may only borrow to satisfy a financial need
determined to be a hardship. Hardship for this purpose shall
have the meaning set forth in Section 10.7(b).
9.3 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and with
such advance notice as prescribed by the Administrator. All
loans shall be evidenced by a promissory note, secured only by
the portion of the Participant's Account from which the loan
is made, and the Plan shall have a lien on this portion of his
or her Account.
9.4 Spousal Consent
A Participant is required to obtain Spousal Consent in order
to take out a loan under the Plan.
9.5 Loan Approval
The Administrator, or the Trustee if otherwise authorized by
the Administrator and expressly agreed to by the Trustee, is
responsible for determining that an loan request conforms to
the requirements described in this Section and granting such
request.
9.6 Loan Funding Limits
The loan amount must meet all of the following limits as
determined as of the Sweep Date the loan is processed:
(a) Plan Minimum Limit. The minimum amount for any loan
is $1,000.
(b) Plan Maximum Limit. Subject to the legal limit
described in (c) below, the maximum a Participant may
borrow, including the outstanding balance of existing
Plan loans, is 100% of the following Accounts which
are fully vested:
Pre-Tax Account
Company Match Account
Rollover Account
(c) Legal Maximum Limit. The maximum a Participant may
borrow, including the outstanding balance of existing
Plan loans, is 50% of his or her vested Account
balance, not to exceed $50,000. However, the $50,000
maximum is reduced by the Participant's highest
outstanding loan balance during the 12 month period
ending on the day before the Sweep Date as of which
the loan is made. For purposes of this paragraph, the
qualified plans of all Related Companies shall be
treated as though they are part of this Plan to the
extent it would decrease the maximum loan amount.
9.7 Maximum Number of Loans
A Participant may have only one loan outstanding at any given
time.
9.8 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets
of his or her own Accounts. The available assets shall be
determined first by Account type and then by investment type
within each type of Account. The hierarchy for loan funding by
type of Account shall be the order listed in the preceding
Plan Maximum Limit paragraph. Within each Account used for
funding a loan, amounts shall first be taken from the Sweep
Account and then taken by type of investment in direct
proportion to the market value of the Participant's interest
in each Investment Fund as of the Trade Date on which the loan
is processed.
Loans will be funded on the Settlement Date following the
Trade Date as of which the loan is processed. The Trustee
shall make payment to the Participant as soon thereafter as
administratively feasible.
9.9 Interest Rate
The interest rate charged on Participant loans shall be a
fixed reasonable rate of interest, determined from time to
time by the Administrator, which provides the Plan with a
return commensurate with the prevailing interest rate charged
by persons in the business of lending money for loans which
would be made under similar circumstances. As of the Effective
Date, the interest rate is determined as set forth in Appendix
C, and may be changed from time to time, without the necessity
of amending this Plan and Trust document.
9.10 Repayment
Substantially level amortization shall be required of each
loan with payments made at least monthly, generally through
payroll deduction. Loans may be prepaid in full or in part at
any time. The Participant may choose the loan repayment
period, not to exceed 5 years.
9.11 Repayment Hierarchy
Loan principal repayments shall be credited to the
Participant's Accounts in the inverse of the order used to
fund the loan. Loan interest shall be credited to the
Participant's Accounts in direct proportion to the principal
payment. Loan payments are credited by investment type based
upon the Participant's current investment election for new
Contributions.
9.12 Repayment Suspension
The Administrator may agree to a suspension of loan payments
for up to 6 months for a Participant who is on a Leave of
Absence. During the suspension period interest shall continue
to accrue on the outstanding loan balance. At the expiration
of the suspension period all outstanding loan payments and
accrued interest thereon shall be due unless otherwise agreed
upon by the Administrator.
9.13 Loan Default
A loan is treated as a default if scheduled loan payments are
more than 90 days late. A Participant shall then have 30 days
from the time he or she receives written notice of the default
and a demand for past due amounts to cure the default before
it becomes final.
In the event of default, the Administrator may direct the
Trustee to report the default as a taxable distribution. As
soon as a Plan withdrawal or distribution to such Participant
would otherwise be permitted, the Administrator may instruct
the Trustee to execute upon its security interest in the
Participant's Account by distributing the note to the
Participant.
9.14 Call Feature
The Administrator shall have the right to call any Participant
loan once a Participant's employment with all Related
Companies has terminated or if the Plan is terminated.
10 IN-SERVICE WITHDRAWALS
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee are
permitted pursuant to the terms and conditions set forth in
this Section and as required by law as set forth in Section
11.7.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in
such manner and with such advance notice as prescribed by the
Administrator. The Participant shall be provided the notice
prescribed by Code section 402(f).
If an in-service withdrawal is one to which Code sections
401(a)(11) and 417 do not apply, such in-service withdrawal
may commence less than 30 days after the aforementioned notice
is provided, if:
(a) the Participant is clearly informed that he or she
has the right to a period of at least 30 days after
receipt of such notice to consider his or her option
to elect or not elect a Direct Rollover for the
portion, if any, of his or her in-service withdrawal
which will constitute an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a Direct Rollover for the
portion, if any, of his or her in-service withdrawal
which will constitute an Eligible Rollover
Distribution or alternatively elects to have such
portion made payable directly to him or her, thereby
not electing a Direct Rollover.
10.3 Spousal Consent
A Participant is required to obtain Spousal Consent in order
to make an in- service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee if otherwise authorized by
the Administrator and expressly agreed to by the Trustee, is
responsible for determining that an in-service withdrawal
request conforms to the requirements described in this Section
and granting such request.
10.5 Minimum Amount, Payment Form and Medium
There is no minimum amount for any type of withdrawal. With
regard to the portion of a withdrawal representing an Eligible
Rollover Distribution, a Participant may elect a Direct
Rollover. The form of payment for an in-service withdrawal
shall be a single lump sum and payment shall be made in cash.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made solely
from the assets of his or her own Accounts and will be based
on the Account values as of the Trade Date the in-service
withdrawal is processed. The available assets shall be
determined first by Account type and then by investment type
within each type of Account. Within each Account used for
funding an in-service withdrawal, amounts shall first be taken
from the Sweep Account and then taken by type of investment in
direct proportion to the market value of the Participant's
interest in each Investment Fund (which excludes Participant
loans) as of the Trade Date on which the in-service withdrawal
is processed.
In-Service withdrawals will be funded on the Settlement Date
following the Trade Date as of which the in-service withdrawal
is processed. The Trustee shall make payment as soon
thereafter as administratively feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may
request the withdrawal of up to the amount necessary
to satisfy a financial need including amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the withdrawal. Only requests for withdrawals
(1) on account of a Participant's "Deemed Financial
Need", and (2) which are "Deemed Necessary" to
satisfy the financial need will be approved.
(b) "Deemed Financial Need". Financial commitments
relating to:
(1) the payment of unreimbursable medical
expenses described under Code section 213(d)
incurred (or to be incurred) by the
Employee, his or her spouse or dependents;
(2) the purchase (excluding mortgage payments)
of the Employee's principal residence;
(3) the payment of unreimbursable tuition and
related educational fees for up to the next
12 months of post-secondary education for
the Employee, his or her spouse or
dependents;
(4) the payment of funeral expenses of an
Employee's family member;
(5) the payment of amounts necessary for the
Employee to prevent losing his or her
principal residence through eviction or
foreclosure on the mortgage; or
(6) any other circumstance specifically
permitted under Code section
401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "deemed
necessary" to satisfy the financial need only if the
withdrawal amount does not exceed the financial need
and all of these conditions are met:
(1) the Employee has obtained all other possible
withdrawals and nontaxable loans available
from all plans maintained by Related
Companies;
(2) the Administrator shall suspend the Employee
from making any contributions to this Plan,
all other qualified and nonqualified plans
of deferred compensation and all stock
option or stock purchase plans maintained by
Related Companies for 12 months from the
date the withdrawal payment is made; and
(3) the Administrator shall reduce the
Contribution Dollar Limit for the Employee
for the calendar year next following the
calendar year of the withdrawal by the
amount of the Employee's Pre- Tax
Contributions for the calendar year of the
withdrawal.
(d) Account Sources for Withdrawal. The withdrawal amount
shall come only from the Participant's fully vested
Accounts, in the following priority order:
Rollover Account
Company Match Account
Pre-Tax Account
The amount that may be withdrawn from a Participant's
Pre-Tax Account shall not include any earnings
credited to his or her Pre-Tax Contribution Account
after December 31, 1988.
(e) Permitted Frequency. There is no restriction on the
number of Hardship withdrawals permitted to a
Participant.
10.8 Rollover Account Withdrawals
No in-service withdrawals are permitted from a Participant's
Rollover Account except as provided elsewhere in this Section.
10.9 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and
over age 59 1/2 may withdraw from the Accounts listed
in paragraph (b) below.
(b) Account Sources for Withdrawal. The withdrawal amount
shall come only from the Participant's fully vested
Accounts, in the following priority order:
Rollover Account
Pre-Tax Account
Company Additional Account
Company Match Account
Company Discretionary Account
(c) Permitted Frequency. There is no restriction on the
number of Over Age 59 1/2 withdrawals permitted to a
Participant.
(d) Suspension from Further Contributions. An Over Age
59 1/2 withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his or
her death, shall be provided with information regarding all
optional times and forms of distribution available, to include
the notices prescribed by Code section 402(f) and Code section
411(a)-11. Subject to the other requirements of this Section,
a Participant, or his or her Beneficiary in the case of his or
her death, may elect, in such manner and with such advance
notice as prescribed by the Administrator, to have his or her
vested Account balance paid to him or her beginning upon any
Settlement Date following the Participant's termination of
employment with all Related Companies, or if earlier, at the
time required by law as set forth in Section 11.7.
If a distribution is one to which Code sections 401(a)(11) and
417 do not apply, such distribution may commence less than 30
days after the aforementioned notices are provided, if:
(a) the Participant is clearly informed that he or she
has the right to a period of at least 30 days after
receipt of such notices to consider the decision as
to whether to elect a distribution and if so to elect
a particular form of distribution and to elect or not
elect a Direct Rollover for all or a portion, if any,
of his or her distribution which will constitute an
Eligible Rollover Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a distribution and a Direct
Rollover for all or a portion, if any, of his or her
distribution which will constitute an Eligible
Rollover Distribution or alternatively elects to have
all or a portion made payable directly to him or her,
thereby not electing a Direct Rollover for all or a
portion thereof.
11.2 Spousal Consent
A Participant is required to obtain Spousal Consent in order
to receive a distribution under the Plan.
11.3 Payment Form and Medium
A Participant may elect to be paid in any of these forms,
except that the form described in (d) is only available for a
Participant who entered the Plan prior to April 1, 1994:
(a) a single lump sum, or
(b) a portion paid in a lump sum, and the remainder paid
later, or
(c) periodic installments over a period not to exceed the
life expectancy of the Participant and his or her
Beneficiary, or
(d) for a single Participant, a single life annuity and
for a married Participant, a single life annuity or a
joint and 50% survivor annuity with the Participant's
spouse as the joint annuitant.
Any annuity option permitted will be provided through the
purchase of a non-transferable single premium contract from an
insurance company which must conform to the terms of the Plan
and which will be distributed to the Participant or
Beneficiary in complete satisfaction of the benefit due.
Distributions other than annuity contracts shall generally be
made in cash. With regard to the portion of a distribution
representing an Eligible Rollover Distribution, a Distributee
may elect a Direct Rollover for all or a portion of such
amount.
11.4 Small Amounts Paid Immediately
If, at the time a Participant's employment with all Related
Companies ends, the Participant's vested Account balance is
$3,500 or less, the Participant's benefit shall be paid as a
single lump sum as soon as administratively feasible after his
or her employment with all Related Companies ends in
accordance with procedures prescribed by the Administrator.
11.5 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from the
assets of his or her own Accounts and will be based on the
Account values as of the Trade Date the distribution is
processed. The available assets shall be determined first by
Account type and then by investment type within each type of
Account. Within each Account used for funding a distribution,
amounts shall first be taken from the Sweep Account and then
taken by type of investment in direct proportion to the market
value of the Participant's interest in each Investment Fund as
of the Trade Date on which the distribution is processed.
Distributions will be funded on the Settlement Date following
the Trade Date as of which the distribution is processed. The
Trustee shall make payment as soon thereafter as
administratively feasible.
11.6 Deemed Distribution
For purposes of Section 8.4, vested Account balances will be
deemed distributed as of the Settlement Date following the
Sweep Date on which the Administrator has reported to the
Trustee that the Participant's employment with all Related
Companies has terminated.
11.7 Latest Commencement Permitted
In addition to any other Plan requirements and unless a
Participant elects otherwise, his or her benefit payments will
begin not later than 60 days after the end of the Plan Year in
which he or she attains his or her Normal Retirement Date or
retires, whichever is later. However, if the amount of the
payment or the location of the Participant (after a reasonable
search) cannot be ascertained by that deadline, payment shall
be made no later than 60 days after the earliest date on which
such amount or location is ascertained but in no event later
than as described below.
Benefit payments shall begin by the April 1 immediately
following the end of the calendar year in which the
Participant attains age 70 1/2 (whether or not he or she is an
Employee).
11.8 Payment Within Life Expectancy
The Participant's payment election must be consistent with the
requirement of Code section 401(a)(9) that all payments are to
be completed within a period not to exceed the lives or the
joint and last survivor life expectancy of the Participant and
his or her Beneficiary. The life expectancies of a Participant
and his or her Beneficiary, if such Beneficiary is his or her
spouse, may be recomputed annually.
11.9 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or
her sole primary Beneficiary, the minimum annual distribution
for each calendar year, beginning with the year in which he or
she attains age 70 1/2, shall not be less than the quotient
obtained by dividing (a) the Participant's vested Account
balance as of the last Trade Date of the preceding year by (b)
the applicable divisor as determined under the incidental
benefit requirements of Code section 401(a)(9).
11.10 Payment to Beneficiary
Payment to a Beneficiary must either: (1) be completed by the
end of the calendar year that contains the fifth anniversary
of the Participant's death or (2) begin by the end of the
calendar year that contains the first anniversary of the
Participant's death and be completed within the period of the
Beneficiary's life or life expectancy, except that:
(a) If the Participant dies after the April 1 immediately
following the end of the calendar year in which he or
she attains age 70 1/2, payment to his or her
Beneficiary must be made at least as rapidly as
provided in the Participant's distribution election;
(b) If the surviving spouse is the Beneficiary, payments
need not begin until the end of the calendar year in
which the Participant would have attained age 70 1/2
and must be completed within the spouse's life or
life expectancy; and
(c) If the Participant and the surviving spouse who is
the Beneficiary die (1) before the April 1
immediately following the end of the calendar year in
which the Participant would have attained age 70 1/2
and (2) before payments have begun to the spouse, the
spouse will be treated as the Participant in applying
these rules.
11.11 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the Participant's
remaining Plan interest at the time of his or her death. The
designation may be changed at any time. However, a
Participant's spouse shall be the sole primary Beneficiary
unless the designation includes Spousal Consent for another
Beneficiary. If no proper designation is in effect at the time
of a Participant's death or if the Beneficiary does not
survive the Participant, the Beneficiary shall be, in the
order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, per stirpes
(by right of representation), or
(c) Participant's estate.
11.12 QJSA and QPSA Information and Elections
The following definitions, information and election rules
shall apply to any Participant who entered the Plan prior to
April 1, 1994 and who elects a life annuity option:
(a) Annuity Starting Date. The first day of the first
period for which an amount is payable as an annuity,
or, in the case of a benefit not payable in the form
of an annuity, the first day on which all events have
occurred which entitle the Participant to such
benefit.
(b) "QJSA". A qualified joint and 50% survivor annuity,
meaning a form of benefit payment which is the
actuarial equivalent of the Participant's vested
Account balances at the Annuity Starting Date,
payable to the Participant in monthly payments for
life and providing that, if the Participant's spouse
survives him or her, monthly payments equal to 50% of
the amount payable to the Participant during his or
her lifetime will be paid to the spouse for the
remainder of such person's lifetime.
(c) "QPSA". A qualified pre-retirement survivor annuity,
meaning that upon the death of a Participant before
the Annuity Starting Date, the vested portion of the
Participant's Account becomes payable to the
surviving spouse as a life annuity (except to the
extent of any outstanding Participant loan balance),
unless Spousal Consent has been given to a different
Beneficiary or the surviving spouse chooses a
different form of payment.
(d) QJSA Information to a Participant. No less than 30
and no more than 90 days before the Annuity Starting
Date, each Participant who requests a life annuity
form of payment shall be given a written explanation
of (1) the terms and conditions of the QJSA, (2) the
right to make an election to waive this form of
payment and choose an optional form of payment and
the effect of this election, (3) the right to revoke
this election and the effect of this revocation, and
(4) the need for Spousal Consent.
(e) QJSA Election. A Participant may elect (and such
election shall include Spousal Consent if married),
at any time within the 90 day period ending on the
Annuity Starting Date, to (1) waive the right to
receive the QJSA and elect an optional form of
payment, or (2) revoke or change any such election.
(f) QPSA Beneficiary Information to Participant. Upon
becoming a Participant (and with updates as needed to
insure such information is accurate and readily
available to each Participant who is between the ages
of 32 and 35), each married Participant shall be
given written information stating that (1) his or her
death benefit is payable to his or her surviving
spouse, (2) his or her ability to choose that the
benefit be paid to a different Beneficiary, (3) the
right to revoke or change a prior designation and the
effects of such revocation or change, and (4) the
need for Spousal Consent.
(g) QPSA Beneficiary Designation by Participant. A
married Participant may designate (with Spousal
Consent) a non-spouse Beneficiary at any time after
the Participant has been given the information in the
QPSA Beneficiary Information to Participant paragraph
above and upon the earlier of (1) the date the
Participant has terminated employment, or (2) the
beginning of the Plan Year in which that Participant
attains age 35.
(h) QPSA Information to a Surviving Spouse. Each
surviving spouse who requests a life annuity form of
payment shall be given a written explanation of (1)
the terms and conditions of being paid his or her
Account balance in the form of a single life annuity,
(2) the right to make an election to waive this form
of payment and choose an optional form of payment and
the effect of making this election, and (3) the
right to revoke this election and the effect of this
revocation.
(i) QPSA Election by Surviving Spouse. A surviving spouse
may elect, at any time up to the Annuity Starting
Date, to (1) waive the single life annuity and elect
an optional form of payment, or (2) revoke or change
any such election.
12 ADP AND ACP TESTS
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12
(where a definition is contained in both Sections 1 and 12,
for purposes of Section 12 the Section 12 definition shall be
controlling):
(a) "ACP" or "Average Contribution Percentage". The
Average Percentage calculated using Contributions
allocated to Participants as of a date within the
Plan Year.
(b) "ACP Test". The determination of whether the ACP is
in compliance with the Basic or Alternative
Limitation for a Plan Year (as defined in Section
12.2).
(c) "ADP" or "Average Deferral Percentage". The Average
Percentage calculated using Deferrals allocated to
Participants as of a date within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is
in compliance with the Basic or Alternative
Limitation for a Plan Year (as defined in Section
12.2).
(e) "Average Percentage". The average of the calculated
percentages for Participants within the specified
group. The calculated percentage refers to either the
"Deferrals" or "Contributions" (as defined in this
Section) made on each Participant's behalf for the
Plan Year, divided by his or her Compensation for the
portion of the Plan Year in which he or she was an
Eligible Employee while a Participant. (Pre-Tax
Contributions which will be refunded solely because
they exceed the Contribution Dollar Limit are
included in the percentage for the HCE Group but not
for the NHCE Group if such excess Pre-Tax
Contributions were made to plans of Related
Companies.)
(f) "Contributions" shall include Company Match
Contributions. In addition, Contributions may include
Pre-Tax and Company Additional Contributions, but
only to the extent that (1) the Employer elects to
use them, (2) they are not used or counted in the ADP
Test, (3) Company Additional Contributions are fully
vested when made and not withdrawable by an Employee
before he or she attains age 59 1/2, and (4) Pre-Tax
Contributions are necessary to meet the ACP Test
Alternative Limitation (defined in Section 12.2 (b))
or the Multiple Use Test.
(g) "Deferrals" shall include Pre-Tax Contributions. In
addition, Deferrals may include Company Additional
Contributions, but only to the extent that (1) the
Employer elects to use them, (2) they are not used or
counted in the ACP Test, and (3) such Contributions
are fully vested when made and not withdrawable by an
Employee before he or she attains age 59 1/2.
(h) "Family Member". An Employee who is, at any time
during the Plan Year or Lookback Year, a spouse,
lineal ascendant or descendant, or spouse of a lineal
ascendant or descendant of (1) an active or former
Employee who at any time during Plan Year or Lookback
Year is a more than 5% Owner (within the meaning of
Code section 414(q)(3)), or (2) an HCE who is among
the 10 Employees with the highest Compensation for
such Year.
(i) "HCE" or "Highly Compensated Employee". With respect
to each Employer and its Related Companies, an
Employee during the Plan Year or Lookback Year who
(in accordance with Code section 414(q)):
(1) Was a more than 5% Owner at any time during
the Lookback Year or Plan Year;
(2) Received Compensation during the Lookback
Year (or in the Plan Year if among the 100
Employees with the highest Compensation for
such Year) in excess of (i) $75,000 (as
adjusted for such Year pursuant to Code
sections 414(q)(1) and 415(d)), or (ii)
$50,000 (as adjusted for such Year pursuant
to Code sections 414(q)(1) and 415(d)) in
the case of a member of the "top-paid group"
(within the meaning of Code section
414(q)(4)) for such Year), provided,
however, that if the conditions of Code
section 414(q)(12)(B)(ii) are met, the
Company may elect for any Plan Year to apply
clause (i) by substituting $50,000 for
$75,000 and not to apply clause (ii);
(3) Was an officer of a Related Company and
received Compensation during the Lookback
Year (or in the Plan Year if among the 100
Employees with the highest Compensation for
such Year) that is greater than 50% of the
dollar limitation in effect under Code
section 415(b)(1)(A) and (d) for such Year
(or if no officer has Compensation in excess
of the threshold, the officer with the
highest Compensation), provided that the
number of officers shall be limited to 50
Employees (or, if less, the greater of three
Employees or 10% of the Employees); or
(4) Was a Family Member at any time during the
Lookback Year or Plan Year, in which case
the Contributions and Compensation of the
HCE and his or her Family Members shall be
aggregated and they shall be treated as a
single HCE.
A former Employee shall be treated as an HCE if (1)
such former Employee was an HCE when he separated
from service, or (2) such former Employee was an HCE
in service at any time after attaining age 55.
The determination of who is an HCE, including the
determinations of the number and identity of
Employees in the top-paid group, the top 100
Employees and the number of Employees treated as
officers shall be made in accordance with Code
section 414(q).
(j) "HCE Group" and "NHCE Group". With respect to each
Employer and its Related Companies, the respective
group of HCEs and NHCEs who are eligible to have
amounts contributed on their behalf for the Plan
Year, including Employees who would be eligible but
for their election not to participate or to
contribute, or because their Pay is greater than zero
but does not exceed a stated minimum.
(1) If the Related Companies maintain two or
more plans which are subject to the ADP or
ACP Test and are considered as one plan for
purposes of Code sections 401(a)(4) or
410(b), all such plans shall be aggregated
and treated as one plan for purposes of
meeting the ADP and ACP Tests, provided
that, for Plan Years beginning after
December 31, 1989, plans may only be
aggregated if they have the same Plan Year.
(2) If an HCE, who is one of the top 10 paid
Employees or a more than 5% Owner, has any
Family Members, the Deferrals, Contributions
and Compensation of such HCE and his or her
Family Members shall be combined and treated
as a single HCE. Such amounts for all other
Family Members shall be removed from the
NHCE Group percentage calculation and be
combined with the HCE's.
(3) If an HCE is covered by more than one cash
or deferred arrangement maintained by the
Related Companies, all such plans shall be
aggregated and treated as one plan for
purposes of calculating the separate
percentage for the HCE which is used in the
determination of the Average Percentage.
(k) "Lookback Year". Pursuant to Code section 414(q), the
Company elects as the Lookback Year the 12 months
ending immediately prior to the start of the Plan
Year.
(l) "Multiple Use Test". The test described in Section
12.4 which a Plan must meet where the Alternative
Limitation (described in Section 12.2(b)) is used to
meet both the ADP and ACP Tests.
(m) "NHCE" or "Non-Highly Compensated Employee". An
Employee who is not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must
meet either the Basic or Alternative Limitation when compared
to the respective ADP and ACP for the NHCE Group, defined as
follows:
(a) Basic Limitation. The HCE Group Average Percentage
may not exceed 1.25 times the NHCE Group Average
Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE Group
Average Percentage as follows:
If the NHCE Group Then the Maximum HCE
Average Percentage is: Group Average Percentage is:
---------------------- ----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a
maximum percentage to be used in place of the calculated
percentage for all HCEs that would reduce the ADP and/or ACP
for the HCE group by a sufficient amount to meet the ADP and
ACP Tests.
(a) ADP Correction. Pre-Tax Contributions shall, by the
end of the next Plan Year, be refunded (including
amounts previously refunded because they exceeded the
Contribution Dollar Limit) to the Participant in an
amount equal to the actual Deferrals minus the
product of the maximum percentage and the HCE's
Compensation. Any Company Match Contributions
attributable to refunded excess Pre-Tax Contributions
as described in this Section 12.3(a) shall be deemed
a Contribution made by reason of a mistake of fact
and removed from the Participant's Account.
(b) ACP Correction. Company Match Contributions shall, by
the end of the next Plan Year, be refunded to the
Participant in an amount equal to the actual
Contributions minus the product of the maximum
percentage and the HCE's Compensation.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined amounts
shall then be taken by type of investment in direct
proportion to the market value of the Participant's
interest in each Investment Fund (which excludes
Participant loans) at the time the correction is
made.
(d) Family Member Correction. To the extent any reduction
is necessary with respect to an HCE and his or her
Family Members that have been combined and treated
for testing purposes as a single Employee, the excess
Deferrals and Contributions from the ADP and/or ACP
Test shall be prorated among each such Participant in
direct proportion to his or her Deferrals or
Contributions included in each Test.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is
used to meet both the ADP and ACP Tests, the ADP and ACP for
the HCE Group must also comply with the requirements of Code
section 401(m)(9). Such Code section requires that the sum of
the ADP and ACP for the HCE Group (as determined after any
corrections needed to meet the ADP and ACP Tests have been
made) not exceed the sum (which produces the most favorable
result) of:
(a) the Basic Limitation (defined in Section 12.2)
applied to either the ADP or ACP for the NHCE Group,
and
(b) the Alternative Limitation applied to the other NHCE
Group percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator shall
determine a maximum percentage to be used in place of the
calculated percentage for all HCEs that would reduce either or
both the ADP or ACP for the HCE Group by a sufficient amount
to meet the multiple use limit. Any excess shall be handled in
the same manner that the distribution of excess Deferrals or
Contributions are handled.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a
Participant or forfeited in accordance with Section 12.3 or
12.5 shall be adjusted for investment gain or loss. Refunds
shall not include investment gain or loss for the period
between the end of the applicable Plan Year and the date of
distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the
Plan meets the ADP, ACP and Multiple Use Tests and that the
Contribution Dollar Limit is not exceeded. In carrying out its
responsibilities, the Administrator shall have sole discretion
to limit or reduce Deferrals or Contributions at any time. The
Administrator shall maintain records which are sufficient to
demonstrate that the ADP, ACP and Multiple Use Tests have been
met for each Plan Year for at least as long as the Employer's
corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs, NHCEs,
and the performance of the ADP, ACP and Multiple Use
Tests and any corrective action resulting therefrom
shall be made separately with regard to the Employees
of each Employer (and its Related Companies) that is
not a Related Company with the other Employer(s).
(b) Collective Bargaining Units: The performance of the
testing and any corrective action resulting therefrom
shall be applied separately to Employees who are
eligible to participate in the Plan as a result of a
collective bargaining agreement.
In addition, separate testing may be applied, at the
discretion of the Administrator and to the extent permitted
under Treasury regulations, to any group of Employees for whom
separate testing is permissible.
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
13.1 "Annual Addition" Defined
The sum of all amounts allocated to the Participant's Account
for a Plan Year. Amounts include contributions (except for
rollovers or transfers from another qualified plan),
forfeitures and, if the Participant is a Key Employee
(pursuant to Section 14) for the applicable or any prior Plan
Year, medical benefits provided pursuant to Code section
419A(d)(1). For purposes of this Section 13.1, "Account" also
includes a Participant's account in all other defined
contribution plans currently or previously maintained by any
Related Company. The Plan Year refers to the year to which the
allocation pertains, regardless of when it was allocated. The
Plan Year shall be the Code section 415 limitation year.
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this
Plan and any other defined contribution plan maintained by any
Related Company for any Plan Year shall not exceed the lesser
of (1) 25% of his or her Taxable Income or (2) the greater of
$30,000 or one-quarter of the dollar limitation in effect
under Code section 415(b)(1)(A).
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual
Addition for such year, Contributions to be made for the
remainder of the Plan Year shall be limited to the amount
needed for each affected Participant to receive the maximum
Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a
Participant's Account (resulting from forfeitures,
allocations, reasonable error in determining Participant
compensation or the amount of elective contributions, or other
facts and circumstances acceptable to the Internal Revenue
Service) the excess amount (adjusted to reflect investment
gains) shall first be returned to the Participant to the
extent of his or her Pre-Tax Contributions (however to the
extent Pre-Tax Contributions were matched, the applicable
Company Match Contributions shall be forfeited in proportion
to the returned matched Pre-Tax Contributions) and the
remaining excess, if any, plus returned Company Match
Contributions, shall be forfeited by the Participant and used
to reduce subsequent Contributions as soon as is
administratively feasible.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess
Annual Addition, received allocations to more than one defined
contribution plan, the excess shall be corrected by reducing
the Annual Addition to this Plan only after all possible
reductions have been made to the other defined contribution
plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the greater
of 125% of the "protected current accrued benefit" or the
normal limit which is the lesser of (1) 125% of the maximum
dollar limitation provided under Code section 415(b)(1)(A) for
the Plan Year or (2) 140% of the amount which may be taken
into account under Code section 415(b)(1)(B) for the Plan
Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit
provided by the Plan determined pursuant to Code
section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined
benefit plan in existence on (1) July 1, 1982, shall
be the accrued annual benefit provided for under
Public Law 97-248, section 235(g)(4), as amended, or
(2) on May 6, 1986, shall be the accrued annual
benefit provided for under Public Law 99-514, section
1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the
Participant's Annual Addition for each Plan Year to date and
the denominator is the sum of the "annual amounts" for each
year in which the Participant has performed service with a
Related Company. The "annual amount" for any Plan Year is the
lesser of (1) 125% of the Code section 415(c)(1)(A) dollar
limitation (determined without regard to subsection (c)(6)) in
effect for the Plan Year and (2) 140% of the Code section
415(c)(1)(B) amount in effect for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the
Code section 415(c) rules in effect for such Plan
Year, and
(b) the numerator is adjusted pursuant to Public Law
97-248, section 235(g)(3), as amended, or Public Law
99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
If a Participant has also participated in a defined benefit
plan maintained by a Related Company, the sum of the Defined
Benefit Fraction and the Defined Contribution Fraction for any
Plan Year may not exceed 1.0. If the combined fraction exceeds
1.0 for any Plan Year, the Participant's benefit under any
defined benefit plan (to the extent it has not been
distributed or used to purchase an annuity contract) shall be
limited so that the combined fraction does not exceed 1.0
before any defined contribution limits will be enforced.
14 TOP HEAVY RULES
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each
qualified plan of an Employer (and its Related
Companies) (1) in which a Key Employee is a
participant or was a participant during the
determination period (regardless of whether such plan
has terminated), or (2) which enables another plan in
the group to meet the requirements of Code sections
401(a)(4) and 410(b). The Employer may also treat any
other qualified plan as part of the group if the
group would continue to meet the requirements of Code
sections 401(a)(4) and 410(b) with such plan being
taken into account.
(b) "Determination Date". The last Trade Date of the
preceding Plan Year or, in the case of the Plan's
first year, the last Trade Date of the first Plan
Year.
(c) "Key Employee". A current or former Employee (or his
or her Beneficiary) who at any time during the five
year period ending on the Determination Date was:
(1) an officer of a Related Company whose
Compensation (i) exceeds 50% of the amount
in effect under Code section 415(b)(1)(A)
and (ii) places him within the following
highest paid group of officers:
Number of Employees Number of
not Excluded Under Code Highest Paid
Section 414(q)(8) Officers Included
----------------- -----------------
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation
exceeds $150,000, or
(4) a more than 0.5% Owner who is among the 10
Employees owning the largest interest in a
Related Company and whose Compensation
exceeds the amount in effect under Code
section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date
of (1) an Employee's Account, (2) the present value
of his or her other accrued benefits provided by all
qualified plans within the Aggregation Group, and (3)
the aggregate distributions made within the five year
period ending on such date. Plan Benefits shall
exclude rollover contributions and plan to plan
transfers made after December 31, 1983 which are both
employee initiated and from a plan maintained by a
non-related employer.
(e) "Top Heavy". The Plan's status when the Plan Benefits
of Key Employees account for more than 60% of the
Plan Benefits of all Employees who have performed
services at any time during the five year period
ending on the Determination Date. The Plan Benefits
of Employees who were, but are no longer, Key
Employees (because they have not been an officer or
Owner during the five year period), are excluded in
the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year
in which the Plan is Top Heavy, the Employer shall
not allow any contributions (other than a Rollover
Contribution) to be made by or on behalf of any Key
Employee unless the Employer makes a contribution
(other than Pre-Tax and Company Match Contributions)
on behalf of all Participants who were Eligible
Employees as of the last day of the Plan Year in an
amount equal to at least 3% of each such
Participant's Taxable Income. The Administrator shall
remove any such contributions (including applicable
investment gain or loss) credited to a Key Employee's
Account in violation of the foregoing rule and return
them to the Employer or Employee to the extent
permitted by the Limited Return of Contributions
paragraph of Section 18.
(b) Overriding Minimum Benefit. Notwithstanding,
contributions shall be permitted on behalf of Key
Employees if the Employer also maintains a defined
benefit plan which automatically provides a benefit
which satisfies the Code section 416(c)(1) minimum
benefit requirements, including the adjustment
provided in Code section 416(h)(2)(A), if applicable.
If this Plan is part of an aggregation group in which
a Key Employee is receiving a benefit and no minimum
is provided in any other plan, a minimum contribution
of at least 3% of Taxable Income shall be provided to
the Employees specified in the preceding paragraph of
this plan. In addition, the Employer may offset a
defined benefit minimum by contributions (other than
Pre-Tax and Company Match Contributions) made to this
Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall
be substituted for 125% in determining the Defined Benefit
Fraction and the Defined Contribution Fraction.
15 PLAN ADMINISTRATION
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator, the
Committee and/or the Trustee, as applicable, whose specific
duties are delineated in this Plan and Trust. In addition,
Plan fiduciaries also include any other person to whom
fiduciary duties or responsibility is delegated with respect
to the Plan. Any person or group may serve in more than one
fiduciary capacity with respect to the Plan. To the extent
permitted under ERISA section 405, no fiduciary shall be
liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with this
Plan and Trust to the extent they are consistent with
ERISA;
(b) use that degree of care, skill, prudence and
diligence that a prudent person acting in a like
capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and
with like aims;
(c) act with the exclusive purpose of providing benefits
to Participants and their Beneficiaries, and
defraying reasonable expenses of administering the
Plan;
(d) diversify Plan investments, to the extent such
fiduciary is responsible for directing the investment
of Plan assets, so as to minimize the risk of large
losses, unless under the circumstances it is clearly
prudent not to do so; and
(e) treat similarly situated Participants and
Beneficiaries in a uniform and nondiscriminatory
manner.
15.3 Company is ERISA Plan Administrator
The Company is the plan administrator, within the meaning of
ERISA section 3(16), which is responsible for compliance with
all reporting and disclosure requirements, except those that
are explicitly the responsibility of the Trustee under
applicable law. The Administrator and/or Committee shall have
any necessary authority to carry out such functions through
the actions of the Administrator, duly appointed officers of
the Company, and/or the Committee.
15.4 Administrator Duties
The Administrator shall have the discretionary authority to
construe this Plan and Trust, other than the provisions which
relate to the Trustee, and to do all things necessary or
convenient to effect the intent and purposes of the Plan,
whether or not such powers are specifically set forth in this
Plan and Trust. Actions taken in good faith by the
Administrator shall be conclusive and binding on all
interested parties, and shall be given the maximum possible
deference allowed by law. In addition to the duties listed
elsewhere in this Plan and Trust, the Administrator's
authority shall include, but not be limited to, the
discretionary authority to:
(a) determine who is eligible to participate, if a
contribution qualifies as a rollover contribution,
the allocation of Contributions, and the eligibility
for loans, withdrawals and distributions;
(b) provide each Participant with a summary plan
description no later than 90 days after he or she has
become a Participant (or such other period permitted
under ERISA section 104(b)(1)), as well as informing
each Participant of any material modification to the
Plan in a timely manner;
(c) make a copy of the following documents available to
Participants during normal work hours: this Plan and
Trust (including subsequent amendments), all annual
and interim reports of the Trustee related to the
entire Plan, the latest annual report and the summary
plan description;
(d) determine the fact of a Participant's death and of
any Beneficiary's right to receive the deceased
Participant's interest based upon such proof and
evidence as it deems necessary;
(e) establish and review at least annually a funding
policy bearing in mind both the short-run and
long-run needs and goals of the Plan. To the extent
Participants may direct their own investments, the
funding policy shall focus on which Investment Funds
are available for Participants to use; and
(f) adjudicate claims pursuant to the claims procedure
described in Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors
(including attorneys, accountants, actuaries, consultants,
record keepers, investment counsel and administrative
assistants) as it considers necessary to assist it in the
performance of its duties. The Administrator shall also comply
with the bonding requirements of ERISA section 412.
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, has appointed a
Committee to administer the Plan on its behalf. The Company
shall provide the Trustee with the names and specimen
signatures of any persons authorized to serve as Committee
members and act as or on its behalf. Any Committee member
appointed by the Company shall serve at the pleasure of the
Company, but may resign by written notice to the Company.
Committee members shall serve without compensation from the
Plan for such services. Except to the extent that the Company
otherwise provides, any delegation of duties to a Committee
shall carry with it the full discretionary authority of the
Administrator to complete such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company
to the Committee may be done by a majority of its
members. The majority may be expressed by a vote at a
meeting or in writing without a meeting, and a
majority action shall be equivalent to an action of
all Committee members.
(b) Meetings. The Committee shall hold meetings upon such
notice, place and times as it determines necessary to
conduct its functions properly.
(c) Reliance by Trustee. The Committee may authorize one
or more of its members to execute documents on its
behalf and may authorize one or more of its members
or other individuals who are not members to give
written direction to the Trustee in the performance
of its duties. The Committee shall provide such
authorization in writing to the Trustee with the name
and specimen signatures of any person authorized to
act on its behalf. The Trustee shall accept such
direction and rely upon it until notified in writing
that the Committee has revoked the authorization to
give such direction. The Trustee shall not be deemed
to be on notice of any change in the membership of
the Committee, parties authorized to direct the
Trustee in the performance of its duties, or the
duties delegated to and by the Committee until
notified in writing.
16 MANAGEMENT OF INVESTMENTS
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of this Plan and Trust which
relate to the Trustee, for use in providing Plan benefits and
paying Plan expenses not paid directly by the Employer. Plan
benefits will be drawn solely from the Trust and paid by the
Trustee as directed by the Administrator. Notwithstanding, the
Administrator may appoint, with the approval of the Trustee,
another trustee to hold and administer Plan assets which do
not meet the requirements of Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the
Trustee to invest Trust assets in one or more Investment
Funds. The number and composition of Investment Funds may be
changed from time to time, without the necessity of amending
this Plan and Trust document. The Trustee may establish
reasonable limits on the number of Investment Funds as well as
the acceptable assets for any such Investment Fund. Each of
the Investment Funds may be comprised of any of the following:
(a) shares of a registered investment company, whether or
not the Trustee or any of its affiliates is an
advisor to, or other service provider to, such
company;
(b) collective investment funds maintained by the
Trustee, or any other fiduciary to the Plan, which
are available for investment by trusts which are
qualified under Code sections 401(a) and 501(a);
(c) individual equity and fixed income securities which
are readily tradeable on the open market;
(d) guaranteed investment contracts issued by a bank or
insurance company; and
(e) interest bearing deposits of the Trustee.
Any Investment Fund assets invested in a collective investment
fund, shall be subject to all the provisions of the
instruments establishing and governing such fund. These
instruments, including any subsequent amendments, are
incorporated herein by reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient deposit
or money market type assets in each Investment Fund to handle
the Fund's liquidity and disbursement needs. Each
Participant's and Beneficiary's Sweep Account, which is used
to hold assets pending investment or disbursement, shall
consist of interest bearing deposits of the Trustee.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in
the Investment Funds as soon as practicable after such
instructions are received from the Administrator,
Participants, or Beneficiaries. Such instructions shall remain
in effect until changed by the Administrator, Participants or
Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company
Shares
The Administrator shall be entitled to vote proxies or
exercise any shareholder rights relating to shares held on
behalf of the Plan in a registered investment company.
Notwithstanding, the authority to vote proxies and exercise
shareholder rights related to such shares held in a Custom
Fund is vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the
Trustee, an investment manager for any Investment Fund
established by the Trustee solely for Participants of this
Plan (a "Custom Fund"). The investment manager may be the
Administrator, Trustee or an investment manager pursuant to
ERISA section 3(38). The Administrator shall advise the
Trustee in writing of the appointment of an investment manager
and shall cause the investment manager to acknowledge to the
Trustee in writing that the investment manager is a fiduciary
to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the
Trustee, shall be established for a Custom Fund. If a
Custom Fund consists solely of collective investment
funds or shares of a registered investment company
(and sufficient deposit or money market type assets
to handle the Fund's liquidity and disbursement
needs), its' underlying instruments shall constitute
the guidelines.
(b) Authority of Investment Manager. The investment
manager of a Custom Fund shall have the authority
to vote or execute proxies, exercise shareholder
rights, manage, acquire, and dispose of Trust assets.
(c) Custody and Trade Settlement. Unless otherwise
expressly agreed to by the Trustee, the Trustee shall
maintain custody of all Custom Fund assets and be
responsible for the settlement of all Custom Fund
trades. For purposes of this section, shares of a
collective investment fund, shares of a registered
investment company and guaranteed investment
contracts issued by a bank or insurance company,
shall be regarded as the Custom Fund assets instead
of the underlying assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated to
invest or otherwise manage any Custom Fund assets for
which the Trustee or Administrator is not the
investment manager nor shall the Administrator or
Trustee be liable for acts or omissions with regard
to the investment of such assets except to the extent
required by ERISA.
16.7 Authority to Segregate Assets
The Company may direct the Trustee to split an Investment Fund
into two or more funds in the event any assets in the Fund are
illiquid or the value is not readily determinable. In the
event of such segregation, the Company shall give instructions
to the Trustee on what value to use for the split-off assets,
and the Trustee shall not be responsible for confirming such
value.
17 TRUST ADMINISTRATION
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe
those provisions of this Plan and Trust which relate to the
Trustee and to do all things necessary or convenient to the
administration of the Trust, whether or not such powers are
specifically set forth in this Plan and Trust. Actions taken
in good faith by the Trustee shall be conclusive and binding
on all interested parties, and shall be given the maximum
possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth
in this Plan and Trust, the Trustee shall have all the power,
authority, rights and privileges of an absolute owner of the
Trust assets and, not in limitation but in amplification of
the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell,
tender, exchange, dispose of, encumber, hypothecate,
pledge, mortgage, lease, grant options respecting,
repair, alter, insure, or distribute any and all
property in the Trust;
(b) borrow money, participate in reorganizations, pay
calls and assessments, vote or execute proxies,
exercise subscription or conversion privileges,
exercise options and register any securities in the
Trust in the name of the nominee, in federal book
entry form or in any other form as will permit title
thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate,
adjust, settle, enforce or foreclose, by judicial
proceedings or otherwise, or defend against the same,
any obligations or claims in favor of or against the
Trust; and
(d) lend, through a collective investment fund, any
securities held in such collective investment fund to
brokers, dealers or other borrowers and to permit
such securities to be transferred into the name and
custody and be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any
Trust assets outside the jurisdiction of the United States,
except as authorized by ERISA section 404(b).
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes with
regard to any Eligible Rollover Distribution that is
not paid as a Direct Rollover. With regard to any
taxable distribution that is not an Eligible Rollover
Distribution, the Trustee shall calculate and
withhold federal (and, if applicable, state) income
taxes in accordance with the Participant's
withholding election.
(b) Taxes Due From Investment Funds. The Trustee shall
pay from the Investment Fund any taxes or assessments
imposed by any taxing or governmental authority on
such Fund or its income, including related interest
and penalties.
17.5 Trustee Duties and Limitations
Unless otherwise agreed to by the Trustee, the Trustee's
duties shall be confined to construing the terms of the Plan
and Trust as they relate to the Trustee, receiving funds on
behalf of and making payments from the Trust, safeguarding and
valuing Trust assets, and investing and reinvesting Trust
assets in the Investment Funds as directed by the
Administrator or Participants. The Trustee shall have no duty
or authority to ascertain whether Contributions are in
compliance with the Plan, to enforce collection or to compute
or verify the accuracy or adequacy or any amount to be paid to
it by the Employer. The Trustee shall not be liable for the
proper application of any part of the Trust with respect to
any disbursement made at the direction of the Administrator.
17.6 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable
period) following the close of the Plan Year, the
Trustee shall provide the Administrator with an
annual accounting of Trust assets and information to
assist the Administrator in meeting ERISA's annual
reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records
and provide sufficient reporting to allow the
Administrator to properly monitor the Trust's assets
and activity.
(c) Administrator Approval. Approval of any Trustee
accounting will automatically occur 90 days after
such accounting has been received by the
Administrator, unless the Administrator files a
written objection with the Trustee within such time
period. Such approval shall be final as to all
matters and transactions stated or shown therein and
binding upon the Administrator.
17.7 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is
not readily tradable and listed on a national securities
exchange registered under the Securities Exchange Act of 1934,
as amended, the Trustee may engage a qualified independent
appraiser to determine the fair market value of such property,
and the appraisal fees shall be paid from the Investment Fund
containing the asset.
17.8 Legal Counsel
The Trustee may consult with legal counsel of its choice,
including counsel for the Employer or counsel of the Trustee,
upon any question or matter arising under this Plan and Trust.
When relied upon by the Trustee, the opinion of such counsel
shall be evidence that the Trustee has acted in good faith.
17.9 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such
as may be mutually agreed upon by the Company and the Trustee.
Trustee fees and all reasonable expenses of counsel and
advisors retained by the Trustee shall be paid in accordance
with Section 6.
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any
Employee. The Employer expressly reserves the right to
discharge an Employee at any time, with or without cause,
without regard to the effect such discharge would have upon
the Employee's interest in the Plan.
18.2 Limited Return of Contributions
Except as provided in this paragraph, (1) Plan assets shall
not revert to the Employer nor be diverted for any purpose
other than the exclusive benefit of Participants or their
Beneficiaries; and (2) a Participant's vested interest shall
not be subject to divestment. As provided in ERISA section
403(c)(2), the actual amount of a Contribution made by the
Employer (or the current value of the Contribution if a net
loss has occurred) may revert to the Employer if:
(a) such Contribution is made by reason of a mistake of
fact;
(b) initial qualification of the Plan under Code section
401(a) is not received and a request for such
qualification is made within the time prescribed
under Code section 401(b) (the existence of and
Contributions under the Plan are hereby conditioned
upon such qualification); or
(c) such Contribution is not deductible under Code
section 404 (such Contributions are hereby
conditioned upon such deductibility) in the taxable
year of the Employer for which the Contribution is
made.
The reversion to the Employer must be made (if at all) within
one year of the mistaken payment of the Contribution, the date
of denial of qualification, or the date of disallowance of
deduction, as the case may be. A Participant shall have no
rights under the Plan with respect to any such reversion.
18.3 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan may
be anticipated, assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit
with respect to a Participant pursuant to a QDRO, or
(b) to use a Participant's vested Account balance as
security for a loan from the Plan which is permitted
pursuant to Code section 4975.
18.4 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the
Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any
payment due him or her, the Administrator shall have the
payment of the benefit, or any part thereof, made to the
person (or persons or institution) whom it reasonably believes
is caring for or supporting the payee, unless it has received
due notice of claim therefor from a duly appointed guardian or
conservator of the payee. Any payment shall to the extent
thereof, be a complete discharge of any liability under the
Plan to the payee.
18.5 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to
payment of a Plan benefit after a reasonable search, the
Administrator may at any time thereafter treat such person's
Account as forfeited and use such amount to offset any
Employer Contributions or as otherwise provided in Section 8.
If such person subsequently presents the Administrator with a
valid claim for the benefit, such person shall be paid the
amount treated as forfeited, plus the interest that would have
been earned in the Sweep Account to the date of determination.
The Administrator shall pay the amount through an additional
Employer Contribution or direct the Trustee to pay the amount
from the Forfeiture Account.
18.6 Claims Procedure
(a) Right to Make Claim. An interested party who
disagrees with the Administrator's determination of
his or her right to Plan benefits must submit a
written claim and exhaust this claim procedure before
legal recourse of any type is sought. The claim must
include the important issues the interested party
believes support the claim. The Administrator,
pursuant to the authority provided in this Plan,
shall either approve or deny the claim.
(b) Process for Denying a Claim. The Administrator's
partial or complete denial of an initial claim must
include an understandable, written response covering
(1) the specific reasons why the claim is being
denied (with reference to the pertinent Plan
provisions) and (2) the steps necessary to perfect
the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested
party may make a written appeal of the
Administrator's initial decision, and the
Administrator shall respond in the same manner and
form as prescribed for denying a claim initially.
(d) Time Frame. The initial claim, its review, appeal and
final review shall be made in a timely fashion,
subject to the following time table:
Days to Respond
Action From Last Action
------ ----------------
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the
maximum response time for its initial and final
review if it provides an explanation within the
normal period of why an extension is needed and when
its decision will be forthcoming.
18.7 Construction
Headings are included for reading convenience. The text shall
control if any ambiguity or inconsistency exists between the
headings and the text. The singular and plural shall be
interchanged wherever appropriate. References to Participant
shall include Beneficiary when appropriate and even if not
otherwise already expressly stated.
18.8 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and
administered under ERISA and other applicable federal laws
and, where not otherwise preempted, by the laws of the State
of California. If any provision of this Plan and Trust shall
become invalid or unenforceable, that fact shall not affect
the validity or enforceability of any other provision of this
Plan and Trust. All provisions of this Plan and Trust shall be
so construed as to render them valid and enforceable in
accordance with their intent.
18.9 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or
inaction, (including a Plan termination in which the Company
fails to apply for a favorable determination from the Internal
Revenue Service with respect to the qualification of the Plan
upon its termination), in relation to the Plan or Trust (1)
including (without limitation) expenses reasonably incurred in
the defense of any claim relating to the Plan or its assets,
and amounts paid in any settlement relating to the Plan or its
assets, but (2) excluding liability resulting from actions or
inactions made in bad faith, or resulting from the negligence
or willful misconduct of the Trustee. The Company shall have
the right, but not the obligation, to conduct the defense of
any action to which this Section applies. The Plan fiduciaries
are not entitled to indemnity from the Plan assets relating to
any such action.
19 AMENDMENT, MERGER AND TERMINATION
19.1 Amendment
The Company reserves the right to amend this Plan and Trust at
any time, to any extent and in any manner it may deem
necessary or appropriate. The Company (and not the Trustee)
shall be responsible for adopting any amendments necessary to
maintain the qualified status of this Plan and Trust under
Code sections 401(a) and 501(a). The Administrator shall have
the authority to adopt Plan and Trust amendments which have no
substantial adverse financial impact upon an Employer or the
Plan. All interested parties shall be bound by any amendment,
provided that no amendment shall:
(a) become effective until it is accepted in writing by
the Trustee (which acceptance shall not unreasonably
be withheld);
(b) except to the extent permissible under ERISA and the
Code, make it possible for any portion of the Trust
assets to revert to an Employer or to be used for, or
diverted to, any purpose other than for the exclusive
benefit of Participants and Beneficiaries entitled to
Plan benefits and to defray reasonable expenses of
administering the Plan;
(c) decrease the rights of any Employee to benefits
accrued (including the elimination of optional forms
of benefits) to the date on which the amendment is
adopted, or if later, the date upon which the
amendment becomes effective, except to the extent
permitted under ERISA and the Code; nor
(d) permit an Employee to be paid the balance of his or
her Pre-Tax Account unless the payment would
otherwise be permitted under Code section 401(k).
19.2 Merger
This Plan and Trust may not be merged or consolidated with,
nor may its assets or liabilities be transferred to, another
plan unless each Participant and Beneficiary would, if the
resulting plan were then terminated, receive a benefit just
after the merger, consolidation or transfer which is at least
equal to the benefit which would be received if either plan
had terminated just before such event.
19.3 Plan Termination
The Company may, at any time and for any reason, terminate the
Plan, or completely discontinue contributions. Upon either of
these events, or in the event of a partial termination of the
Plan within the meaning of Code section 411(d)(3), the
Accounts of each affected Employee who has not yet incurred
a Break in Service shall be fully vested. Distributions or
withdrawals will be made in accordance with the terms of the
Plan as in effect at the time of the Plan's termination or as
thereafter amended provided that a post-termination amendment
will not be effective to the extent that it violates Section
19.1 unless it is required in order to maintain the qualified
status of the Plan upon its termination. The Trustee's and
Employer's authority shall continue beyond the Plan's
termination date until all Trust assets have been liquidated
and distributed.
19.4 Termination of Employer's Participation
Any Employer may terminate its Plan participation upon written
notice executed by the Employer and delivered to the Company.
Upon the Employer's request, the Company may instruct the
Trustee and Administrator to spin off all affected Accounts
and underlying assets into a separate qualified plan under
which the Employer shall assume the powers and duties of the
Company. Alternatively, the Company may treat the event as a
partial termination described above or continue to maintain
the Accounts under the Plan.
19.5 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and Trust or
may be removed by the Company at any time upon at least 90
days written notice (or less if agreed to by both parties). In
such event, the Company shall appoint a successor trustee by
the end of the notice period. The successor trustee shall then
succeed to all the powers and duties of the Trustee under this
Plan and Trust. If no successor trustee has been named by the
end of the notice period, the Company's chief executive
officer shall become the trustee, or if he or she declines,
the Trustee may petition the court for the appointment of a
successor trustee.
19.6 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as is administratively
feasible after its resignation or removal as Trustee,
the Trustee shall transfer to the successor trustee
all property currently held by the Trust. However,
the Trustee is authorized to reserve such sum of
money as it may deem advisable for payment of its
accounts and expenses in connection with the
settlement of its accounts or other fees or expenses
payable by the Trust. Any balance remaining after
payment of such fees and expenses shall be paid to
the successor trustee.
(b) Final Accounting. The Trustee shall provide a final
accounting to the Administrator within 90 days of the
date Trust assets are transferred to the successor
trustee.
(c) Administrator Approval. Approval of the final
accounting will automatically occur 90 days after
such accounting has been received by the
Administrator, unless the Administrator files a
written objection with the Trustee within such time
period. Such approval shall be final as to all
matters and transactions stated or shown therein and
binding upon the Administrator.
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered to Participants and Beneficiaries as of
the Effective Date include this set of daily valued funds:
Category Funds
-------- -----
Money Market Money Market
Income U.S. Treasury Allocation
Balanced Asset Allocation
Equity Growth Stock
Fidelity Contra
Combination LifePath
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the Money
Market Fund.
III. Maximum Percentage Restrictions Applicable to Certain Investment Funds
As of the Effective Date, there are no maximum percentage restrictions
applicable to any Investment Funds.
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
1) Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants.
2) Special Fund Maintenance Fees: These are paid by the Employer on a
quarterly basis.
3) Recordkeeping Fees: These are paid by Participants and are assessed
monthly and billed/collected from Accounts quarterly.
4) Loan Fees: A $3.50 per month fee is assessed and billed/collected
quarterly from the Account of each Participant who has an outstanding
loan balance for loans entered into on or after April 1, 1994. For
loans entered into prior to April 1, 1994, these are paid by the
Employer on a quarterly basis.
5) Investment Fund Election Changes: For each Investment Fund election
change by a Participant, in excess of 4 changes per year, a $10 fee
will be assessed and billed/collected quarterly from the Participant's
Account.
6) Recurring Payment Fees: A $3.00 per check fee will be assessed and
billed/collected quarterly from the Participant's Account.
7) Additional Fees Paid by Employer: All other Plan related fees and
expenses shall be paid by the Employer. To the extent that the
Administrator later elects that any such fees shall be borne by
Participants, the fees shall be added to the recordkeeping fees and
assessed against Participants' Accounts, per 3) above and estimates of
the fees shall be determined and reconciled, at least annually.
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant loans shall
be equal to the Trustee's prime rate, plus 2%.